IRDAI's Bima Sugam debuts this November: Why it's a gamechanger
What's the story
The Insurance Regulatory and Development Authority of India (IRDAI) is all set to launch its much-anticipated digital insurance marketplace, Bima Sugam. The platform is expected to go live by November, IRDAI Chairman Ajay Seth told Moneycontrol. The initiative aims at simplifying and making the process of buying insurance more transparent for consumers.
Market impact
Bima Sugam to revolutionize insurance buying experience
Seth described Bima Sugam as a customer-facing market infrastructure institution.
The platform is expected to revolutionize the insurance buying experience, just like how UPI transformed payments.
It will provide a common platform for all insurers, eliminating fragmentation, and enabling consumers to compare products across different companies easily.
This way, commissions won't be the main driver of sales anymore, but rather product quality and value offered by insurers.
Operational details
Not-for-profit platform
The Bima Sugam platform will operate on a not-for-profit, nominal-fee basis.
This is to ensure that commissions don't become the main focus of sales.
Seth said the Public Insurance Registry (PIR) would provide a common data layer for the platform.
He stressed that PIR should support multiple customer-facing platforms instead of being the only one, and it would be rolled out in phases starting with high-value use cases.
Digital transition
Part of broader strategy to digitize insurance
The launch of Bima Sugam is part of IRDAI's broader strategy to digitize the insurance buying and servicing process.
Seth said that digitalization should play a bigger role in insurance, just like it has in banking, mutual funds, and capital markets.
However, he clarified that this doesn't mean traditional distribution will be replaced by digital processes.